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Business
Anuja Nadkarni

Private sector wins on pay against public service

More than 18,300 staff in the public service and selected agencies earned more than $100,000, and 31 of them earned $400,000-plus. Photo: Lynn Grieveson

The Government’s first census of its employees this week reveals the mood within the public sector

Wage growth in the public sector fell for the first time since 2018, compared to the private sector, new Government data shows.

With big agencies like Ministry of Social Development hiring 3000 new staff and Corrections recruiting 2200 last year, the Government surveyed its $5 billion workforce this year for the first time through a census. 

More than 60,000 public servants across 36 core government agencies took part in the census, with Te Kawa Mataaho (Public Service Commission) planning to hold one every two years.

The findings reveal private sector wage growth outstripped public sector wage growth for eight years until 2018, when public sector wages caught up, driven by increases in health and education.

But this year the trend reversed again with wages in the private sector growing by 2.2 percent compared with 1.9 percent in the public sector.

More than 18,300 staff in the public service and selected agencies earned more than $100,000, representing more than a quarter of the workforce.

There was also a 3.7 percent increase in salaries due to the lowest paid and frontline occupations receiving large increases in pay.

But the director of the Victoria University Centre for Labour, Employment and Work in the School of Management, Stephen Blumenfeld, says the impetus for this wasn't the sudden benevolence of state sector employers, rather the increases to the legislated minimum wage over the past three years, the strength of the Living Wage Movement and the pay equity concerns (including the care workers' settlement).

The number of people earning more than $400,000 doubled to 31 this year, but Blumenfeld says this is decided by the remuneration authority, which considers comparability in the private sector.

Victoria University of Wellington school of government associate professor Karl Löfgren has been studying New Zealand’s public sector and comparing it with Sweden’s.

Löfgren says leadership has become a central feature in how we think about the state services.

“In order to actually achieve better public services, we need better leaders. And at the same time, whatever survey you look at, if you ask people working in the sector, they report the leadership is rubbish. So there’s this paradox,” he says.

In an article published on Newsroom earlier this year, Löfgren wrote that the growth of managers exceeded the growth of front-line and operative workers from 2007–2018. The first census of the public sector confirms his findings, he says.

The number of managers has grown from about 5700 in 2018 to 7100 in 2021, meanwhile the number of contact centre workers dropped from about 5000 in 2018 to 4800 this year.

There was also a 3.7 percent increase in salaries due to legislated minimum wage over the past three years, the strength of the Living Wage Movement and the pay equity concerns including the care workers' settlement. Photo: Unsplash

Just 41 percent of public servants have customer-facing roles working directly with the public, external customers and clients, or people in their care.

“Anecdotal evidence points at an increasing number of public servants involved in either securing compliance with performance indicators internally, or with deflecting the organisation from outsider actors seeking to hold the organisation accountable, protecting its reputation. The attention is on making sure the right boxes are ticked, and to protect yourself from external critique.”

In August the Office of the Ombudsman revealed the Chief Ombudsman received 1389 complaints about OIA decisions in the year to June 30, up 5 percent on the previous year. 

Complaints about refusals to provide information, either in full or in part, made up more than half of the 722 complaints about OIA responses in the first half of this year.

Amongst the occupation groups, social, health and education workers (up 947, or 9.4 percent) and “information professionals” such as data analysts (up 886 or 11.8 percent) had the largest increases in staff numbers.

Proportionally, legal, HR and finance professionals had the largest increase (up 455 or 17.3 percent) due to the significant legal consultation due to pandemic restrictions.

Löfgren says another aspect of the data that stood out is the high turnover of staff.

“When it comes to managers it’s common for them to move every second year which means you’re actually losing not only the institutional memory but also continuity of stewardship of a service,” he says.

The data shows after turnover dropped last year to 10.1 percent after its peak in 2018, but the trend lifted again this year slightly, with unplanned turnover hitting 10.5 percent.

In the year to June 30, 2021, public service employees took on average 8.1 days of sick and domestic leave, up from 7.6 days in 2020.

The 2021 Workforce data shows the average length of service of public service employees is 8.4 years. The length of tenure within a single agency has been trending down since 2016, when it was 9.5 years.

"It is important that the spirit of service embodied by public service workers is matched by the support they need to maintain reasonable workloads and a good work life balance." – Kerry Davies, Public Service Association

There was also a 3.7 percent increase in salaries due to the lowest paid and frontline occupations receiving large increases in pay.

The number of people earning more than $400,000 doubled to 31 this year, but Blumenfeld says this is decided by the remuneration authority which considers comparability in the private sector.

Public Service Association national secretary Kerry Davies says the trend most concerning to the union is that workers in the public service are going above and beyond, to the detriment of their health, happiness and home lives.

About half of the participants were satisfied with their work/life balance, which was lower than the 76 percent of employed New Zealanders who were satisfied in the most recent Stats NZ Survey of Working Life 2018.

"It is important that the spirit of service embodied by public service workers is matched by the support they need to maintain reasonable workloads and a good work life balance,” Davies says.

“Throughout the pandemic, public servants have worked for the country at all alert levels and with increased pressure and work demands. Because of their commitment to keeping the country going and providing support for others they have put in huge extra effort.

"In this kind of pressured work environment people, are tired and risk burn out.”

She says public service agencies need to do more to recognise workers’ contributions and improve their conditions at work.

“Improvements include flexible working, eliminating pay gaps and discrimination, adequate staffing and better professional development and career pathways.

“If you work for one agency, you have quite a different experience than if you work for another. We want that standard of experience to be high, and to be consistent right across.”

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